Neuropoietin (NP) is a recently identified member of the interleukin (IL)-6 family of cytokines, which share glycoprotein 130 (gp130) as a signal-transducing receptor component, and is highly expressed in embryonic brain. In this study, we show that NP has the potential to induce neuroepithelial cells to differentiate into astrocytes. NP stimulation leads to promoter activation of the gene for an astrocyte marker, glial fibrillary acidic protein (GFAP), which is clearly inhibited by either expression of a dominant-negative form of a transcription factor, signal transducer and activator of transcription 3 (STAT3) or by a nucleotide-substitution in the STAT3-binding element within the gene promoter. We further show that NP induces binding of endogenous STAT3 to its cognate sequence within the gfap gene promoter in neuroepithelial cells. Moreover, like the other IL-6 cytokine family members, NP promotes astrocyte differentiation in a synergistic manner with bone-morphogenetic protein (BMP)-2. Taken together, our data indicate that NP can be considered as a new astrocyte-inducing cytokine in the developing brain.